There was another step discussed on one of the threads that involve "walking up the directory" just after the
* search for a master template in the current directory (ie, directory-local master)
step. So if the current directory is /web/yourserver/www/student/resources/notes then the template is searched in the path in the following order:
/web/yourserver/www/student/resources/notes
/web/yourserver/www/student/resources
/web/yourserver/www/student
/web/yourserver/www
I think this step is very important for a flexible templating system.